Paul Krugman on Tom Perkins

by Editor
January 27, 2014 at 9:35 am

http://www.smartertimes.com/1115/paul-krugman-on-tom-perkins

Paul Krugman's New York Times column is about a letter to the editor of the Wall Street Journal from Tom Perkins, a founding partner of venture capital firm Kleiner, Perkins, Caufield and Byers. From the letter:

Writing from the epicenter of progressive thought, San Francisco, I would call attention to the parallels of fascist Nazi Germany to its war on its "one percent," namely its Jews, to the progressive war on the American one percent, namely the "rich."

From the Occupy movement to the demonization of the rich embedded in virtually every word of our local newspaper, the San Francisco Chronicle, I perceive a rising tide of hatred of the successful one percent.

I also suspect that today's Masters of the Universe are insecure about the nature of their success. We're not talking captains of industry here, men who make stuff. We are, instead, talking about wheeler-dealers, men who push money around and get rich by skimming some off the top as it sloshes by. They may boast that they are job creators, the people who make the economy work, but are they really adding value? Many of us doubt it — and so, I suspect, do some of the wealthy themselves, a form of self-doubt that causes them to lash out even more furiously at their critics.

It's usually a good idea to avoid talking about Nazi Germany in connection with anything other than Nazi Germany. But the notion that Tom Perkins, of all people, was just a skimmer who didn't really add any value is just irresponsibly disconnected from the facts. His big deal was Genentech — this CBS report says Kleiner Perkins turned a $250,000 investment into $200 million. This is a company that cloned human insulin and human growth hormone. Ask a diabetic or anyone with a growth problem helped by the hormone if Tom Perkins added value. He was the first general manager of the Hewlett Packard company's computer division.

Not only is the accusation by Professor Krugman that Mr. Perkins just shuffled money around false, but, ironically enough, the distinction made by Professor Krugman between financial and non-financial capitalism has ugly historical precedents. From the FutureOfCapitalism review of the book Capitalism and the Jews:

It was Karl Marx, who was converted to Lutheranism as a child by his parents, who managed to combine the old blood libel against the Jews with an attack on capitalism. "Capital is dead labor which, vampire-like, lives only by sucking living labor, and lives the more, the more labor it sucks," Mr. Muller quotes Marx as saying in Capital. Mr. Muller goes on, "When Lenin later referred to the necessity of eliminating capitalists because they were 'bloodsuckers,' he was merely heightening Marx's own metaphor."

It is a short leap from this to the work of the Nazi economic theorist Gottfried Feder, who, Mr. Muller writes, "distinguished between Aryan and Jewish forms of capitalism, the former industrial and creative, the latter financial and parasitic."

Or to that of the anti-Semitic American automaker Henry Ford, who Mr. Muller quotes as writing that, "the Jew is a mere huckster, a trader who doesn't want to produce, but to make something out of what somebody else produces."

It's been interesting to see the Kleiner Perkins firm and various others scurry to distance themselves publicly from Mr. Perkins' remarks. I doubt anyone will distance himself from Professor Krugman's, which are troubling in their own way as well, both for the false accusation and for the false distinction.

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